Buying or selling a home can seem like a daunting prospect for people who haven’t gone through the process before. There are a lot of questions that arise and it can seem confusing when dealing with the ins and outs of financing a sale, especially because so many costs arise that need to be covered. There are several different ways to deal with the costs of buying or selling a home depending on each individual circumstance. A home appraisal cost is an example of one of the expenses that will arise in a home sale. Mortgage lenders will require a home appraisal so they can match the amount of the loan to the home and property value as closely as possible.
Who Chooses, Who Pays
The cost of a home appraisal generally runs around $250, but may be more (upward of $600) or less depending on several factors such as the size of the home, the condition of the home, how quickly the appraisal needs to be completed, the type of appraisal needed (such as one for a Federal Housing Administration (FHA) loan or a simple update to an existing appraisal), and even the home’s location.
In a situation where the mortgage lender is considering financing the purchase of a home for a buyer, the lender will choose a state-licensed or certified appraiser to act as a neutral third party in assessing the value of the home and property. Most appraisers are members of associations that govern their ethics and procedures. The person who has requested a loan to purchase a home will cover the costs, although there are instances where another party could pay. This will depend on how the contract is written between the mortgage lender and the buyer.
Other Reasons an Assessment is Needed
However, a home appraisal does not necessarily have to be part of buying a new house or trying to sell a home, specifically. In fact, homeowners may decide to have a home appraised for refinancing their existing mortgage or taking out a loan using the house as collateral. Tax assessment is another reason a homeowner may need to have the house appraised. In those instances, the homeowner will be responsible for covering the cost of the appraisal, although the refinancing institution, lender, or tax authority may choose who the appraiser will be.
Additionally, the homeowner must cover the cost of anything associated with the appraisal, such as repairs around the house to get a better assessment. Some homeowners are willing to hire someone to paint the interior or exterior, have light repairs done, clean, or landscape the property to increase the potential of a good assessment.